Dallas-Fort Worth ranked second among commercial real estate investors

A recent survey of commercial real estate investors ranked Dallas-Fort Worth is one of the top two target markets for investment among Americas metros, second only to Los Angeles/Southern California.

That, according to CBRE’s 2018 Americas Investor Intentions Survey. The survey, which covered all asset types, shows that 88 percent of investors plan to either maintain or increase spending in 2018—up from 83 percent in 2017.

The Dallas-Fort Worth area was No. 2 in 2017 as well, according to the same survey. Other Texas cities also fare well. Houston came in No. 4 after being listed at No. 7 in 2017, part of a trend of “gateway” cities to increase their rankings, according to the survey. Austin came in at No. 10, up one spot from 2017.

The survey also looked at how investors view each of the different asset types:

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• Industrial – Industrial is increasingly the preferred property type, cited by 50 percent of investors as the most attractive for investment in 2018, up from 38 percent in 2017.

• Multifamily – Cited by 20 percent of investors, multifamily is the next most attractive property types, though its share decreased from last year.

• Office: Fourteen percent of investors said they are planning to invest in office product in 2018.

• Retail: Despite competition from e-commerce, the retail sector improved modestly from last year (10 percent in 2018 vs. 8 percent in 2017).

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“This survey confirms an important shift in investor interest from established core markets to markets with high growth fundamentals,” said John Alvarado, S

senior vice president, CBRE Capital Markets’ Institutional Properties. “This trend should benefit Dallas, which remains as one of the nation’s highest growth markets. Our on-the-ground experience so far this year confirms an uptick in interest by first-time buyers in Texas.”

The survey also provided insight into how investors view the growing trend of co-working. At 20 percent of a building’s total space, more than 90 percent of investors see co-working as having a positive or neutral effect on a building’s long-term capital value. However, more than half of the respondents said that once co-working space climbs to 40 percent or more of a building’s total space, it adversely affects valuations.

“Despite the possibility of escalating interest rates, the vast majority of investors intend to acquire assets in the Americas in 2018. Risk tolerance is expected to remain unchanged, but investors’ search for yield and asset diversification is pushing them toward value-add assets, secondary markets and alternatives in 2018,” said Brian McAuliffe, president, Institutional Properties, Capital Markets, CBRE.